HINDALCO INDUSTRIES Vs. INDIAN FARMERS FERTILIZERS COOPERATIVE LIMITED

JUDGEMENT

(1.) Hindalco Industries ('Hindalco') [Unit of Birla Copper, a part of the Indo-Gulf Fertilizers and Chemicals Corporation Ltd. ('IGCL')] has filed this petition under Section 34 of the Arbitration and Conciliation Act, 1996 ('Act') challenging the majority Award dated 12 th July 2004 of the Arbitral Tribunal which adjudicated the disputes between the Petitioner and Respondent Indian Farmers Fertilizers Cooperative Ltd. ('IFFCO') arising out of a Memorandum of Understanding ('MoU') dated 19 th January 1999 for long term supply of phosphoric acid.

(2.) The MoU was for a period of three years commencing 1 st January 1999 and ending on 31 st December 2001. It was stated that if the extension of agreement was not agreed upon mutually by buyer or seller on or before 30 th June 2001, the agreement would expire on 31 st December 2001. The specifications of the Phosphoric acid were set out in Article 2.1.0. It was indicated therein that the analysis of the elements comprising of phosphoric acid were to serve only as guidance. However, "the figure binding for seller shall be the guaranteed minimum concentration of P2O5 and maximum suspended solids." Under Article 2.2.1, the buyer IFFCO was to have the right to reject any parcel having suspended solid content above 1.75% and P2O5 content below 51.5% subject to relevant clauses in the MoU.

(3.) Under Article 3.1.0, the seller, i.e., IGCL undertook to supply to IFFCO the following quantities in metric tonnes ('MT') of phosphoric acid (P2O5) on 100% P2O5 basis confirming to the specification set out in Article-II:-